Mike's Spotlight

Make 5 Minutes to Read This – It’s Important

In September overnight borrowing rates jumped 500% in less than 4 hours. And nobody’s talking about why. Too bad because it’s a major warning.

but then again – so is the pension strike in France.
andthe civil violence in Hong Kong, Chile, Venezuela, Argentina, Bolivia and Columbia.
plus  – the fact that Deutsche Bank just sold $50 billion in distressed emerging market debt to Goldman Sachs.

Forgive me for getting right to it but the above is just a foreshadowing of the major trends that will dominate starting in January and going through 2022. The list is a long one – liquidity crisis, pension problems, social unrest, European banking problems and an emerging market debt crisis.

As Martin Armstrong wrote in July, “I have never witnessed such complete disruption to the world economy on a massive scale of this nature.” And it will impact currencies, stocks, interest rates, precious metals and commodity prices.

The volatility is going to be profound.  That’s one of the lessons to take from the sharp increase in overnight lending rates on September 16th when borrowers went from paying 2% to 10% in a matter of hours. But what’s not being said publicly is – much like in 2008 with Lehman Brothers, AIG and Bear Sterns – banks didn’t want to lend to other financial institutions because they didn’t know what exposure borrowers had to Deutsche Bank’s problems.

The Federal Reserve was forced to step in and provide an average of $75 billion a day to keep the overnight lending market operational, but it won’t fix the underlying problem of declining confidence and liquidity. And the Fed is still injecting money with no end in sight.

Declining confidence and lack of liquidity is the recipe for a “no bid” market, which is what keeps me up at night because it won’t be the last time. (Let that sink in for a moment)

We are on the cusp of the next phase of the monetary crisis and the liquidity problem is just one aspect – and it’s not difficult to understand.

Quick question, would you lend your money to the government or a bank if they promised to give you less back in five or ten years? Probably not – and that’s the problem with negative yield bonds. Instead of buying them, individuals and pools of capital are choosing to put their US cash in safety deposit boxes or other safe keeping thereby removing liquidity from the system.  Keep in mind that 70% of all US cash is held outside the US – and that’s creating a big problem.

The central banks aren’t talking about it because they don’t want to spook investors, because once confidence erodes you get a situation like the credit crisis in 2008.

I appreciate that you’re not reading or hearing about this in the mainstream media – and there is certainly no shortage of opinions, predictions and recommendations. The only way to evaluate and judge whether one approach or model is better than another is the examine the track record.

And on that score I don’t know a better one than what we’ve produced at the World Outlook Financial Conference. We unequivocally forecast the record bull market in US stocks since March 2009 and have not wavered. We recommended every dip in quality stocks as a buying opportunity. Our World Outlook Conference Small Cap Portfolio, done in conjunction with Keystone Financial, has never failed to return double digit profits. As I write today, the 2019 recommended portfolio is up 61%.

As we’ve been predicting on MoneyTalks since 2010, the European Union would come apart. Then, as predicted, Brexit went through alongside the rise of other anti-EU parties. And given the current protests in France over the attempt to adjust unaffordable public sector pensions – don’t be surprised if you start hearing rumblings in France about leaving the EU.

Our recognition that the problems in Europe would push hundreds of billions of dollars worth of euros into the US has been key in our recommendation to buy US dollars, stocks and bonds.  Since the 2013 WOFC we’ve recommended putting 30% of your money in US dollar denominated assets and cash. We upped that to 50% in 2014. We first recommended playing the euro to go down when it was at 1.54 to the dollar – it’s now in the 1.10 range – and my bet is that there’s more money to be made on the downside.

The US dollar related recommendations illustrate the approach we take at the World Outlook Financial Conference and on MoneyTalks. You start by getting the big picture right and then devise strategies to take advantage of it.

At this year’s conference we’ll talk about when that major, pivotal US dollar trend will reverse. You can’t afford to get this wrong.

My Point

Maybe we’ve been lucky that every year our specific recommendations have paid for the price of a ticket several times over. Although past performance is not a guarantee of future results, featuring analysts with exceptional track records like Martin Armstrong, Ryan Irvine and Mark Leibovit (who in September, Timers Digest named gold market and stock market Timer of the Year) – puts the odds in our favour.

No Surprise 

As you probably guessed, I want you to come to the World Outlook Financial Conference. Why? Because we’re living in a time of historic change and people who don’t understand what’s going on are going to be financial road kill. Of course, many people already are – but conference attendees who followed our past recommendations into the US dollar, US stocks, real estate in Vancouver, Phoenix, Montreal and Victoria, and have bought the World Outlook Small Cap Portfolio have done well.

But I also understand that not everyone is interested in their personal finances – and I respect that, but I’ll warn you that whether you’re interested or not – what’s coming starting in January through 2022 will have a dramatic impact on your financial well being.

I hope to see you at the Conference.

All my best,

Mike

PS – The World Outlook Conference is Friday Feb 7th  and Saturday, Feb. 8th  at the Westin Bayshore in Vancouver.  For tickets and other details CLICK HERE.

PPS – As you probably know I’m big on educating our younger generation – goodness knows I go on about it enough. To that end we have a special offer – if you buy a ticket – you can bring a student or some other young person in your life, absolutely free. The only thing is that we ask you to let us know that you want a student ticket when you purchase your ticket. We have a limited number set aside and we want to be able to accommodate you

CKNW Kids’ Fund Pledge Day

Michael will be broadcasting live today from 2pm to 4pm pacific time as part of the 42nd annual CKNW Kid’s Fund Pledge Day. With your help, the Fund enhances the lives of children living with physical, mental, social, and behavioural challenges. Donate to make life a little easier for children with special needs.

Listen Live and call in to donate at 604.222.9898

Or donate online at Kid’s Fund Pledge Day

Instant Wisdom

Self described “soft lefty”, author, actor, comedian and gay rights advocate, Stephen Frye on the dangers of the cult of political correctness.

Big Fat Idea – US Single Family Home Developments

Justin Smith, president of Hawkeye Wealth joins Michael to share how Canadian investors can participate and profit in large scale housing sub-division development in the US. For more information on these investments CLICK HERE.

This is going to be a challenge to survive

“I have never witnessed such complete disruption to the world economy on such a massive scale. This is going to be a challenge to survive.”
Martin Armstrong

That’s a serious statement and I’ll bet big time that it’s true.  Problems we’ve been warning about at the World Outlook Financial Conference and on MoneyTalks – pensions, sovereign debt, European banking disasters, political upheaval – they are happening right before our eyes, but few seem to understand (or care?) what’s going on.

This past week the former head of the Bank of England, Melvyn King stated that “we are sleep walking toward a crisis” that will surpass 2008.  We’re not talking about an event in the distant future. It’s already begun to happen, and as we go through the next two years everyone is going to be impacted.

I’ll give you an example.  In late September interest charged by banks to lend to other banks overnight jumped from 2% to 10% in a matter of hours.  In other words, banks were afraid to lend to other banks so they charged a massive risk premium forcing the Federal Reserve to inject $500 billion into the lending markets in just a week. And they’re still putting hundreds of billion in the system because lending banks are worried what’s on the balance sheet of the borrowing banks.

That’s what a liquidity crisis looks like.  Suddenly governments, pension funds and other major institutions trying to sell bonds can’t find a buyer.  That’s what happened during the 2008 credit crisis and the losses were huge. Pension funds are already being impacted by the manipulation of interest rates to record lows with over $15 trillion in negative yield bonds – but the losses during a liquidity and monetary crisis will be much greater.

I think most people had to know deep down that trying to solve the 2008 credit and debt crisis by encouraging more borrowing with record low interest rates would have consequences.

By the way, if you understand what’s going on and position yourself correctly not only will you survive this period but you’ll make a lot of money. For example, we’ve been talking about the problems in Europe pushing money into the US dollar and quality stocks in search of safety since 2010 and the Greek bond crisis.  And it’s still happening.  US stocks are making new highs while the US dollar continues to be the strongest currency in the world.

Our financial well being rests on understanding of what’s driving these events, yet few people seem to.  And by the way – while I appreciate there are a ton of opinions and analysis out there, the only way to evaluate and judge whether one approach or model is better than another is the examine the track record. And on that score I don’t know a better one than what we’ve produced at the World Outlook Financial Conference. We unequivocally forecast the record bull market run since March 2009 – and we haven’t changed our long term view.

Coming out of the turmoil and decline last November and December we predicted increasing volatility with indexes pushing to new highs.  And here we are over 10 months later and we’ve witnessed the volatility along with new highs in the major indexes.

Specific stock recommendations at the conference like Microsoft are up 35%, Xpel Inc is up 95%, Viemed is up over 85%, Go Easy is up 37%, Parkland Fuel is up 22%.  Our small cap portfolio put together with Ryan Irvine and Keystone Financial is once again up double digits. Virtually all recommendations are up with the notable exception of oil and gas stocks, but those recommendations were for people willing to hold 3 to 5 years. It wasn’t a trading recommendation so the jury is still out. At this year’s conference we will ask Josef Schachter for an update.

Making money and protecting you from losses is the goal of the World Outlook Financial Conference, and I’m very pleased with the results. For anyone who acted on the specific advice, the $159 ticket was probably the best investment they made last year.

Here’s A Bit of A Shock

What’s about to happen in the next 2 years is going to make the last five years seem tame. The Deutsche Bank’s financial problems are scaring bankers throughout the world, Europe’s sovereign debts are insurmountable, the Brexit outcome is still uncertain with the UK election on December 12th.  Can you imagine what the market response will be if Labour’s far, far left Jeremy Corbyn wins?

Our goal is to make sure you are not only protected from the fall-out of these events but also profit. Unfortunately, the vast majority of people won’t be prepared. For example, retirees aren’t going to receive the promised benefits in many cities and states. Consider that Illinois’ pension liability is now 280% of its entire annual tax revenues. Their state pension needs another $137 billion to meet their obligations – and it’s not going to happen.

My Point

The world is changing in dramatic fashion. Volatility is going to intensify. The World Outlook Financial Conference track record speaks for itself. Our official World Outlook Small Cap portfolio has delivered double digit returns every year. We can help you navigate those changes and the volatility.

To sum it up – this is my long winded way of saying I hope I see you at our 31th annual Conference along with speakers like Martin Armstrong, Greg Weldon, Ryan Irvine, and James Thorne to name just a few.

Then again, maybe you’re not interested – and believe me I get that. Maybe you already are on top of things. Maybe there’s something good on TV. I have no idea. All I know is that periods of historic change provide incredible opportunities and incredible danger.

All I’m trying to do is help you avoid the danger part and take advantage of the opportunities.

The 2020 World Outlook Conference is Friday, February 7th and Saturday, February 8th at the Westin Bayshore Conference Centre in Vancouver.  For tickets and other details CLICK HERE.

I hope to see you there.

Sincerely

Mike

P.S.   Check our the list of “extras” with our VIP tickets – and the EARLY BIRD prices for the next few weeks!

  • Breakfast and lunch with bonus speakers and presentations
  • Reserved seating
  • VIP Investment Kit
  • and more…

Finally

As you may know I am hugely interested in educating our younger generation and to that end we have a special offer – if you buy a ticket – you can bring a student absolutely free. Simply add the student ticket(s) to your cart when you order your own passes.

Big Fat Idea – Alternatives to Stocks

Investment Advisor Jamie Switzer suggests it may be time to look at some portfolio options that perform independently from the stock market. Tune in for his big ideas.